Comment Re:The problem... (Score 2) 173
BTW why doesn't electric street motorcycles get more attention?
Motorcycle riders can't figure out how to take the baffles out, so they'll never catch on.
BTW why doesn't electric street motorcycles get more attention?
Motorcycle riders can't figure out how to take the baffles out, so they'll never catch on.
Neither does Windows 7 (source.)
Wow, Windows Phone 7 is so insignificant that they wouldn't even port Carrier IQ to it?
Based on your numbers, prices are up 220%, not 300%. If something costs 3x what it used to, that's a 200% increase, not a 300% increase.
T-mobile may have lost a bunch of potential customers while the merger was pending, i.e. anyone that hates AT&T would be very reluctant to to sign a phone contract with T-mobile knowing they would be stuck with AT&T if the deal went through.
How hard would it be for Groupon to make the default limit be a small number? If the business selects a large number with a large discount, then their forms could ask, "Can you really service this number of customers over this time?"
If they had a default limit of 100 customers, Groupon would have made 85 times less money on this deal than they did (100 customer instead of 8,500). In other words, the bad press has to cost them 85 businesses just to eat up the profit they made on this one.
Regarding the press that they're getting, I would say it breaks down three ways:
1) Some businesses - I'll never do Groupon because of this.
2) Other businesses - She was an idiot and I'm not, so it will work for me. Look at all those customers Groupon can deliver!
3) Consumers - Prices on Groupon are so good that businesses are losing money selling to me. Awesome deal for me! I need to do more Groupon.
If they put out a statement saying it is exclusive, it means the studio signed a contract saying that they won't (for some period of time) license it to anyone else. It's not just a matter of the studio saying "We're offering it to anyone that wants to pay, but Netflix is the only one that has stepped forward so far." They are contractually prohibited from licensing it to anyone else that comes along and makes an offer. The studio would be crazy to forgo that opportunity without getting something in return.
The point of exclusivity is to draw more customers to your service.
That may be one point of it, but it is not the only one. Before I provide some other reasons for doing exclusive deals, I have to say a quick word about competition. When there truly is competition, prices of services are driven down to the cost of providing them (including a normal return on investment capital) -- above that point, a competitor can increase its profits by undercutting the others. When you have a monopoly (or oligopoly where companies elect not to compete), companies will set prices to extract the maximum total profit from consumers. That's why text messages cost so much in the U.S. when providing the service costs so little -- price is based on what people are willing to pay, rather than on what it costs to provide the service.
So, other reasons for Netflix to seek exclusivity:
1) They now have a monopoly on the TV show Arrested Development, which means they have a greater ability to increase prices for their service. If someone loves Arrested Development more than life itself, they have to pay whatever Netflix chooses to charge, because there is no other (legal) way for them to see the show. Instead of drawing more customers to Netflix, Netflix may actually find that they achieve a higher total profit by raising the price to a point where they end up with fewer customers but a much higher profit per customer. Fewer consumers get the benefit of seeing Arrested Development, those that do see it pay more than they otherwise would have, and Netflix makes more money -- all consumers are worse off and Netflix is better off, made possible by a monopoly.
2) By doing many such exclusive deals, Netflix may be able to starve competing services of content to a point where they cannot stay in business. If Netflix is successful at doing so, it goes from having a monopoly on a few shows to having a monopoly on digital video delivery in general, giving them much greater power to increase prices down the road.
If you're not expecting to make enough from new customers to pay for the exclusivity deal, then making the deal doesn't make economic sense for your business.
It makes economic sense to do the deal if it will, as part of their overall strategy (i.e. the deal cannot be considered in isolation, but must also take into account the non-linear impact of doing many such deals and driving competitors under), lead to greater total profits in the long term. Such profits may come from adding subscribers at the current price, as you assert, or they may come from positioning themselves to extract much more money from each subscriber via monopoly pricing, or from a combination of the two.
There's absolutely no reason to raise rates on existing customers to pay for an exclusivity deal.
They just raised rates on subscribers by 60% a few months ago (if you kept the same DVD + streaming service that you had before, rather than switching to a reduced service). Since then, this is the second exclusive deal that they've announced (this was the first). Coincidence? Maybe. Maybe not.
Businesses have principles?
I didn't say that. I dislike businesses doing exclusive deals because it is a way to extract greater profits from consumers by creating an artificial monopoly. It's my principles that I was referring to, not the principles of the businesses involved. Of course, my opinion (and hopefully that of people who understand my point) of a business is lowered when I see them doing such things.
Netfix surely could have gotten the content cheaper if it was non-exclusive. The price hike everyone was griping about isn't being spent (entirely) on bringing more content to Netflix subscribers. Part of it is being spent on keeping content away from subscribers of other content delivery services, i.e. exclusivity. You're happy to pay more to help Netflix shut out its competitors, right?
Note: I'm not arguing about whether or not Netfix is a good deal for the price. I'm arguing against exclusivity as a matter of principle -- it's an abuse of customers to make them pay more in order to make the market less competitive (which ultimately hurts consumers).
Intel had to agree to give Rambus the ability to block shipments of Intel processors if Rambus felt Intel was not promoting RDRAM sufficiently
Summary gets confusing when you leave words out.
I really wish the Y! charts would include an option to represent present value of a DRIP [fool.com] investment at the beginning of the period.
I've been complaining to Yahoo about that for years. It's especially bad for mutual funds since they are required to make (potentially substantial) distributions each year. For example, note the sharp drops in December 2006 and December 2007 -- they have no economic significance (fund price drops by $X and shareholder receives $X in cash), but they mangle the graph and make it really hard to compare funds.
I asked Siri that question, and it responded: "You've already asked one time too many." It then displayed a map showing me how to get to Mexico.
Has the purchase even closed yet? From the press release:
The transaction is expected to close by the end of 2011 or early 2012.
It might be a little early for the Google purchase to have any impact on the phones. Hopefully someday, though.
a somewhat already saturated market
I have to disagree that the market is saturated. In a competitive market, prices are driven toward the cost of production (plus a normal return on investment) since competitors will undercut each other to get business until they reach that point. Without sufficient competition that doesn't happen, and pricing reflects profit maximization -- i.e., companies charge the most that consumers are willing to pay and reap substantial profits. With U.S. telecoms charging $0.10 for text messages when it costs virtually nothing (certainly not $0.10 or even $0.05) to provide the service, I would say we are quite far from saturation.
What of these 23% are smartphones?
All of them. From the summary:
Samsung shipped 27.8 million smartphones in the last quarter, taking 23.8 percent of the market
"Protozoa are small, and bacteria are small, but viruses are smaller than the both put together."